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TDS ON HOME LOAN INTERST

ritesh garg (article) (95 Points)

17 July 2010

One of my CA's client is subject to tax audit and has taken home loan from a non banking finance company, is he liable to deduct on interest payment. if yes how will he do so when the payment is made through ECS of equal amount every month

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4 Replies

Akhil Gupta (Manager F&A) (856 Points)
Replied 21 July 2010

As per Sec 194A, Any person, not being an individual or a HUF, who is responsible for paying to a resident any income by way of interest, other than interest on securities, is required to deduct income tax thereon at the rates in force.

So without knowing the status of client the query can not be resolved.

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(Guest)

dear friend

if ur client is a company or a firm then he is required to deduct tds if the amount of interest exceed rs.5000. divide the amount of tds into 12 months and deduct that partial amount every month.

regards

tarun rustagi

(Guest)

if ur client is individual or huf(if liable to tax audit as u said) then he is also required to deduct tds.

regards

tarun rustagi

Samir (ACA) (113 Points)
Replied 22 July 2010

Dear Ritesh,

First of all i don't think a Company can get Housing Loan (He is not an Individual)

If he is an Individual then there is no qestion of TDS as payment of interest is his personal liability and he is not required to deduct TDS on that amount. (If his business falls under Tax Audit - that is a different issue, he is required to deduct TDS only for Business Expenditure and not for personal expenditure)

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